Real estate agents or property dealers are licensed professionals who assist in finalising real estate transactions, including selling, buying or renting. In the homebuying journey, they help buyers find suitable properties, provide market insights, facilitate negotiations, and assist and guide them through the legal and documentation procedures. The role of an experienced and reliable agent cannot be ignored, as it can make or break a deal, quite literally. Choosing the wrong agent can lead to challenges or costly mistakes, and even legal complications. Homebuying is a complex process, and it is important to choose a trustworthy broker to minimise the stress and risks. In this guide, we discuss the common problems homebuyers face with real estate agents and some useful tips when dealing with them.
High commission and hidden charges
One of the most common problems buyers face with brokers and agents is the high commission or fee. Typically, real estate agents charge commission as a specific percentage of the final sale price. For example, if the property’s final price was Rs 1.5 crore and the commission rate is 2%, the amount the buyer must pay is Rs 3 lakh. Some agents may levy a flat fee, which may be negotiated. Moreover, some agents may levy hidden fees for property viewing, paperwork or legal verification services. These broker charges and various other costs associated with property purchase, such as stamp duty and moving costs, can significantly increase the overall cost for a homebuyer.
Quick tips:
- Before finalising a broker, find out the typical commission rates and hidden charges in your location
- Do not hesitate to negotiate the rates and ask for an explanation if any charges seem unusual
- Make sure to document all the communication with the broker
Limited market knowledge
Buying or selling a house necessitates thorough knowledge of the market to determine the right price, predict potential market conditions and identify the right buyers. Dealing with an inexperienced broker can be challenging for buyers, especially first-time homebuyers. Many buyers who work with brokers lacking adequate market knowledge have received vague solutions or wrong advice with respect to investments. If brokers are not familiar with the location, the chances of under-pricing or over-pricing are higher. They may tend to misguide the buyers on the property appreciation potential.
Quick tips:
- It is important always to choose an experienced broker with in-depth knowledge of the local market. However, if you find the one you are dealing with lacks the required skills, it is better to do prior research yourself.
- Cross-check property information, including pricing, by checking builder’s official website or similar listings online.
Lack of transparency
The real estate market, after the implementation of RERA, is becoming a secure and transparent market for property investors. There are strict regulations that developers and real estate agents must follow, especially in terms of disclosing information on properties. Withholding details about property, such as any ongoing legal issues, past disputes, pricing, hidden charges, etc. can invite strict action against the agents. Thus, it is crucial for a buyer to know their rights and RERA laws to safeguard their interest. Some agents may take advantage of buyer’s lack of knowledge and exhibit a lack of transparency. Not disclosing the commission structure, inadequate information on the market or hiding issues with the property – these are some common challenges homebuyers often face when dealing with real estate agents.
Quick tips:
- When selecting an agent, make sure the agent has RERA registration by checking it on the state RERA website
- In case the agent hides information, file a complaint with the RERA or in a consumer court.
Delays and poor communication
The common complaint homebuyers have regarding their experience with brokers is the infrequent or poor communication. This can be a serious problem for a homebuyer who is actively searching for a property, especially in a competitive market where there are thousands of other buyers. Promptness in addressing buyer queries and timely clarification of their doubts is of utmost importance for any successful broker, as it could mean loss of potential clients. More importantly, a buyer may miss out on opportunities in a fast-moving market due to delays on the broker’s part. Besides, some brokers may struggle to explain complex details to potential buyers, which can make the process stressful.
Quick tips:
- Before finalising a broker, set clear expectations and communication protocols in terms of frequency and mode of communication.
- Politely discuss with the broker regarding the issues faced during the interaction and seek the support of a higher authority (agency’s manager) if required.
Lack of professionalism
Besides poor responses to buyer queries or calls, some brokers do not match their client’s expectations simply because of a lack of professionalism. A broker’s professional approach can greatly benefit a buyer and make the homebuying experience faster and hassle-free. However, not all agents meet these high standards, and it is ultimately the buyer who must face the risks. Some signs of lack of professionalism include adopting aggressive sales tactics, being late to site visits or a lack of preparation or research on the property.
Another common grievance among homebuyers is the lack of after-sales support, including inadequate follow-ups, vague solutions, and a failure to take accountability when issues arise. This could lead to a waste of time and money for a buyer.
Quick tips:
- Maintain documented evidence of the broker’s unprofessional behaviour, such as texts, emails, etc.
- Discuss the issues with the broker and file a complaint with the RERA or relevant authority if the broker fails to help.
Conflict of interest
There may be a conflict of interest when working with a real estate agent and this often happens when the agent prioritises their personal benefit or that of the seller over the buyer’s needs. The agent may earn higher commissions or incentives from certain developers and, as a result, try to persuade buyers to purchase properties from those developers. In certain scenarios involving dual agency, a broker may be representing both buyer and seller. So, there could be lack of fairness and the broker may be unable to see the buyer’s best interest. This not only makes them untrustworthy but may also lead buyers to make wrong decisions.
Quick tips:
- Directly communicate with the broker and explain the situation
- Consider switching to another broker or agency
- Seek advice of a real estate lawyer for a suitable solution
Legal and documentation issues
Real estate agents have the responsibility to guide buyers with the legal and documentation aspects during the property buying journey. Not having a reliable agent may create problems for a buyer. The agent may be unable to offer necessary assistance or overlook basic checks such as verifying property title, approvals from local authorities or checking for any pending disputes. These could translate into bigger issues such as property ownership disputes, delays in property registration or financial implications.
Quick tips:
- If the agent is rushing the process without explaining the legal implications, do not go ahead with the property transaction.
- Conduct due diligence before finalising a property
- File a complaint with RERA or seek the assistance of a legal counsel
Housing.com News Viewpoint
Real estate agent plays a key role in a property buying journey and it can either be an easy process or a stressful one, depending on whether or not the agent is experienced and professional. Lack of transparency, biased advice, hidden costs, poor communication and legal oversights – all these could be red flags, and a buyer should consider switching the broker. It is highly recommended to choose a RERA-registered agent with sound experience of the local property market. Exploring multiple brokers, comparing their fee structure and services, asking the right questions and cross-verifying property details are all crucial steps to a smooth property buying experience.
FAQs
How to identify a reliable real estate agent?
A trustworthy real estate agent should have the RERA registration. They should have a proper process to support buyers during every stage of the homebuying journey, including after-sales support.
What is the maximum commission a broker can charge?
Broker commission may vary based on the location, property type, etc. Typically, broker charges in key cities in India may range between 1% and 5%.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |